Australian property market falls for first time in three years

Australian property market falls for first time in three years

Weaker investment activity is weighing on the Australian housing market, says the REIA.

Image supplied by LJ Hooker.

This home on Sydney's northern beaches recently sold for $3 million.

After 13 consecutive quarters of growth, the weighted average median house price for the eight Australian capital cities decreased in the last quarter of 2015, reports the Real Estate Institute of Australia.

The REIA's latest Real Estate Market Facts publication states the housing market recorded its first decrease since the December quarter of 2012.

"The weighted average capital city median price decreased by 0.4% to $695,788 for houses, and 0.7% to $543,468 for other dwellings," said REIA President Neville Sanders.

"Strong growth in Hobart, Canberra, and Brisbane, followed by marginal increases in Darwin and Perth, were unable to offset falling median house prices in Sydney and Melbourne, while Adelaide recorded no change over the quarter," he said.

"Annual growth is still strong but lower compared to what we observed over the last couple of years. Compared to the December quarter of 2014, the weighted average median house price increased by 7.4% (for the year), while the figure for other dwellings went up by 5.7%."

Sanders said the data suggests the Sydney market could have peaked.

"Sydney, the strongest market in the recent years, showed the largest decrease in median prices," he said.

"Regulatory frameworks are responsible for the decrease in the value of investment housing commitments. Uncertainty around the future on negative gearing arrangements is expected to further contribute to the decline in investor activity. With this, owner occupiers continue to have a strong presence in the stabilising market," concluded Sanders.